ATO to start risk-reviewing wealthy Aussies

The Australian Taxation Office (ATO) has announced that by the end of the month it will start risk-reviewing all wealthy Australians and their private groups to ensure they pay the right amount of tax to protect revenue.

Nationally there are about 175 private groups controlling almost 6000 entities with more than $1 billion in turnover or $500 million in net assets, the government agency said.

"While most wealthy Australian and their private groups do the right thing — contributing around $31 billion in income tax last financial year — some choose to avoid tax," ATO acting second commissioner, Michael Cranston, said.

"We are shifting our approach and will be visiting our largest private groups to look at their tax affairs in real time, raise any concerns, and resolve issues before companies lodge their tax returns."

VIEW ALL

View all

Cranston said that 30,000 privately owned and wealthy groups that had been open and transparent about their affairs would not be subject to audit for specific income years.

"We are providing real-time information on risks, activities, and results in this market as part of our commitment to being transparent in our approach to our compliance activities," he said.

The ATO said behaviours that would attract their attention are:

• tax or economic performance is not comparable to similar businesses;
• low transparency of tax affairs;
• large, one-off or unusual transactions, including transfer or shifting of wealth;
• a history of aggressive tax planning;
• tax outcomes inconsistent with the intent of the law;
• choosing not to comply or regularly taking controversial interpretations of the law;
• lifestyle not supported by after-tax income;
• treating private assets as business assets;
• accessing business assets for tax-free private use; and
• poor governance and risk-management systems.